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More Funding for Business and Trade to Help Lao PDR Recover from Pandemic

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The World Bank and the Government of Lao PDR have agreed to scale up a Competitiveness and Trade Project that will improve the ability of businesses to recover from the economic effects of COVID-19 as part of the government’s emergency response to the pandemic. The additional financing will provide a US$6.5 million grant through the Lao Competitiveness and Trade Multi-Donor Trust Fund supported by Australia, Ireland, and the United States.

The extra funding follows a request by the Ministry of Industry and Commerce for additional resources to help the government and private sector respond to the challenges posed by COVID-19 and related restrictions. The Lao economy, which had already been slowing since 2018 following floods, drought and crop disease outbreaks, has been hit badly by the pandemic since early 2020, causing poverty to rise by an estimated 4.4 percentage points.

This additional financing complements the government’s approach of providing rapid and direct relief to vulnerable firms and to adjusting government services to the effects of COVID-19. Helping viable businesses to survive and grow will help them maintain and create jobs, thereby driving economic recovery.

The ministry has been implementing the original Lao PDR Competitiveness and Trade Project since late 2018 with $13 million of credit and grants from the World Bank and the trust fund. The project works to improve the processes required to start and operate a business, and to reduce the costs of doing business in Laos. Measures to lower trade costs and facilitate trade flows include streamlining regulations to reduce the time that goods spend at borders. Business Assistance Facility grants are available to help companies improve their competitiveness, while the project also supports improved policy making and transparency, along with stronger public-private policy dialogue.

According to H.E. Somchith Inthamith, Deputy Minister of Industry and Commerce, “the new financing will be used to scale up and extend activities under the original project, such as decreasing the time required for goods to clear customs, and increasing the ability of our producers to connect to markets. Additional resources will be used to help new Lao firms set up, and aid existing companies seeking grants to mitigate the impact of COVID-19”.

Mariam Sherman, Country Director for the World Bank in Myanmar, Cambodia, and Laos, said that over a year into the COVID-19 pandemic, the country has faced significant economic stress, especially considering the effects of the crisis on important trade partners. “This project has been prepared with urgency”, she said. “It can help the Lao government accelerate policy changes and regulatory reforms that will improve the ease of doing business, facilitate trade, and support company competitiveness. Such reforms will help Lao firms weather shocks, increase their ability to do business on the ground, and provide access to international markets for necessary inputs and outputs”.

The Lao Competitiveness and Trade Multi-Donor Trust Fund is a continuing effort to improve the efficiency of development assistance for trade in the Lao PDR, by pooling resources from the World Bank, Australia, and Ireland for increased efficiency of implementation, reduced transactions costs and greater impact on-the-ground.

Since the start of the COVID-19 pandemic, the World Bank Group has committed over $125 billion to fight the health, economic, and social impacts of the pandemic, the fastest and largest crisis response in its history. The financing is helping more than 100 countries strengthen pandemic preparedness, protect the poor and jobs, and jump start a climate-friendly recovery. The Bank is also providing $12 billion to help low- and middle-income countries purchase and distribute COVID-19 vaccines, tests, and treatments.

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Development

Despite COVID-19 connectivity boost, world’s poorest left far behind 

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Digital connectivity is indispensable to overcome the pandemic, and for a sustainable and inclusive recovery. Photo: United Nations/Chetan Soni

Some 2.9 billion people still have never used the internet, and 96 per cent live in developing countries, a new UN report has found. According to the International Telecommunication Union (ITU), the estimated number of people who have gone online this year actually went up, to 4.9 billion, partially because of a “COVID connectivity boost”.   

This is good news for global development, but ITU said that people’s ability to connect remains profoundly unequal – as many hundreds of millions might only go online infrequently, using shared devices or facing connection speeds that hamper their internet use. 

“While almost two-thirds of the world’s population is now online, there is a lot more to do to get everyone connected to the Internet,” Houlin Zhao, ITU Secretary-General said. 

“ITU will work with all parties to make sure that the building blocks are in place to connect the remaining 2.9 billion. We are determined to ensure no one will be left behind.” 

‘Connectivity boost’ 

The UN agency’s report found that the unusually sharp rise in the number of people online suggests that measures taken during the pandemic contributed to the “COVID connectivity boost.” 

There were an estimated 782 million additional people who went online since 2019, an increase of 17 per cent due to measures such as lockdowns, school closures and the need to access services like remote banking.  

Uneven growth 

According to the document, users globally grew by more than 10 per cent in the first year of the COVID crisis, which was the largest annual increase in a decade. But it pointed out that growth has been uneven. 

Internet access is often unaffordable in poorer nations and almost three-quarters of people have never been online in the 46 least-developed countries.  

A ‘connectivity Grand Canyon’ 

Speaking in Geneva, Doreen Bogdan-Martin, Director of the ITU said: “The internet divide runs deep between developed and developing countries. Only a third of the population in Africa is using the internet. 

“In Europe, the shares are almost 90 per cent, which is the gap between those two regions of almost 60 percentage points. And there is what the UN Secretary-General António Guterres, has called in his Common Agenda blueprint for the future, “a connectivity Grand Canyon”. 

‘Digitally excluded’ 

The report found that younger people, men and urban dwellers are more likely to use the Internet than older adults, women and those in rural areas, with the gender gap more pronounced in developing nations. 

Poverty, illiteracy, limited electricity access and a lack of digital skills continued to hinder “digitally excluded” communities, ITU noted. 

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Development

World Bank Group and Azerbaijan Sign Agreement to Strengthen Partnership

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The Government of the Republic of Azerbaijan and the World Bank Group signed today an Agreement on Establishing and Operation of Offices in Azerbaijan.

The Agreement was signed by Minister of Finance Samir Sharifov, on behalf of the Republic of Azerbaijan, and World Bank Vice President for Europe and Central Asia Anna Bjerde, on behalf of the World Bank Group. Prime Minister of Azerbaijan Ali Asadov and Governor of the Central Bank of Azerbaijan Elman Rustamov also took part in the signing event.

The signing of the new Establishment Agreement will greatly facilitate the work of the World Bank Group in Azerbaijan, including administration of its offices in Baku, to support joint efforts to achieve a green and resilient recovery through sustainable, inclusive and equitable growth.

“Our partnership with the World Bank has seen Azerbaijan’s incredible transition from a lower-income country to a donor of the International Development Association, the part of the World Bank Group that helps the world’s poorest countries,” said Ali Asadov, Prime Minister of Azerbaijan. “This agreement will help augment these achievements.”

The World Bank has financed over 50 projects, with total commitments of $4.4 billion, spanning many national development priorities, including building human capital, strengthening access to infrastructure, public services and jobs, investing in agricultural competitiveness and rural development, and supporting the livelihoods of internally displaced persons.

“We look forward to continuing to grow and develop our collaboration with the Government of Azerbaijan and to bringing the best experience and expertise the World Bank can offer in support of Azerbaijan’s 2030 vision and development goals,” said Anna Bjerde, World Bank Vice President for Europe and Central Asia.

As the largest global development institution focused on the private sector in emerging markets, IFC, a member of the World Bank Group, has been supporting the private sector in Azerbaijan and has invested around $850 million in the country, including mobilization.

“A vibrant private sector is crucial for economic growth. The signing of this agreement with Azerbaijan comes at a time when the country is taking steps to have the private sector drive economic diversification. IFC is committed to continue supporting sustainable growth in Azerbaijan by helping mobilize the power of the private sector,” said Wiebke Schloemer, IFC’s Acting Vice President for Europe, Latin America, and the Caribbean.

2022 will mark the 30th anniversary of Azerbaijan’s membership in the World Bank.

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Development

ILO launches new tool on social dialogue

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The ILO has launched a new tool  to help its constituents enhance the effectiveness and inclusiveness of their national social dialogue institutions.

The tool was developed as part of the Plan of Action on social dialogue and tripartism  (2019-2023) that was endorsed by the ILO Governing Body at its March 2019 session . The Plan also implements the resolution and conclusions on social dialogue of the International Labour Conference (ILC) held in June 2018 .

The self-assessment method for social dialogue institutions (SAM-SDI) guides the social dialogue actors – governments, employers’ and workers’ organizations – through a process that analyses the inclusiveness and effectiveness of their social dialogue institutions. Based on this analysis, they can devise and implement an action plan to increase the institution’s impact on policy-making.

Social dialogue, based on respect for freedom of association and the right to effective collective bargaining, has a crucial role in designing policies to promote social justice and social and economic progress.

Social dialogue institutions have a key role to play in the achievement of the UN Sustainable Development Goals  (SDGs), particularly SDG 16, which promotes peaceful and inclusive societies for sustainable development, access to justice for all and effective, accountable and inclusive institutions at all levels.

Social dialogue is also an essential component of SDG 8 , which promotes sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all. It is also central to the achievement of SDG 5, on gender equality.

The SAM-SDI consists of six inter-linked steps. It is available online in English, French and Spanish, on a self-contained USB card and through an interactive e-Platform hosted by the ILO’s International Training Centre.

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